Frequently Asked Questions about the GreenFaith AP Solar Residential Solar Program

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1 Frequently Asked Questions about the GreenFaith AP Solar Residential Solar Program Questions 1. What steps does the homeowner follow to have a solar array installed? 2. How long is the term of the agreement? 3. Does the homeowner own the solar array? 4. How does the lease-to-own agreement work? 5. How will I pay for electricity after I have a solar array? 6. What kind of roof is suitable for a solar array? 7. How long does a solar array last? 8. Why does a homeowner need to have a credit check, and what criteria are used? 9. Can homeowners ever purchase the solar array outright from the system s owner? 10. Do homeowners need to pay any additional homeowners insurance because they have a solar array installed on their home? 11. Does a homeowner s property tax increase as a result of having a solar array installed? 12. What happens if a homeowner wants or needs to sell their home? 13. What is the impact of a solar array on the value, sales price, and speed of sale for homes? 14. Can condominium units have a solar array installed through this program? 15. Who is the owner that provides the funding to install the solar array? 16. How can the owner afford to install the solar array at no cost? 17. What role does AP Solar play? 18. How is the system maintained? Is the homeowner responsible for any maintenance? 19. What happens at the end of the agreement? 20. What happens if a homeowner needs to repair the roof during the life of the system? 21. Do homeowners receive any of the renewable energy credits, tax credits or values, or any other government grants or subsidy programs related to the solar array? 22. How does the system owner measure the amount of electricity generated by the array on my roof? Answers 1. What steps does the homeowner follow to have a solar array installed? Homeowners follow a 6-step process to have a solar array installed through this program. Step 1: AP Solar assesses your roof s suitability for a solar array. Step 2: AP Solar analyzes your annual electricity usage in order to understand the size of array that your usage can support. 1

2 Step 3: The program owner conducts a credit check, confirms that you are the owner of your home, that you are current on your electric bill, and that there are no outstanding liens or judgments against your home. Step 4: AP Solar staff visits your home, confirms that your roof is suitable, and enrolls you in the program, locking in funding for your system. Step 5: AP Solar s engineering team conducts a detailed engineering analysis of your roof and finalizes the plans for the solar array on your home. Step 6: AP Solar secures all necessary permits, installs the system, and finalizes all necessary inspections and commissioning. Then the system is turned on. 2. How long is the term of the agreement? Twenty years. After the twentieth year, the homeowner has the option, but not the requirement, to purchase the system at its fair market value. If the homeowner does not purchase the system, the system owner removes the solar array from the home at no charge. The homeowner also has the option to renew the lease for a period of time decided on by the homeowner and the owner of the system. 3. Does the homeowner own the solar array? No. The solar array is owned by the funding source that pays for the installation, and to whom the homeowner makes the lease payments. The funding source referred to in this document as the owner, assumes all responsibility for the cost of installation, monitoring, service and maintenance of the system. 4. How does the lease-to-own agreement work? After the solar array in installed, the homeowner receives the electricity generated by the panels, along with the Solar Renewable Energy credits that the system generates. In return, the homeowner makes a monthly lease payment that, in most cases, is less than the value of the electricity and the SRECs. Your proposal from AP Solar will detail your monthly savings and costs so that you can decide if the program is right for you. 5. How will I pay for electricity after I have a solar array? Currently, you receive an electric bill from your utility each month. After you go solar, you will still receive an electricity bill from your utility, but it will be smaller because much of your electricity will be generated by the solar array on your roof. You will pay the owner a monthly lease payment for the solar equipment on your roof. This cost is fixed each year, and will escalate from year to year at a rate of approximately 3%. You will also receive payments from a broker for the sale of the Solar Renewable Energy Credits associated with the solar array on your roof. One SREC is generated for every 1,000 kilowatt hours of solar electricity. Your solar proposal will detail your expected receipts from the SRECs. 2

3 To summarize once the solar array is installed on your home: You will continue to pay your utility for any electricity that you use which is not generated by the solar array. You will pay a monthly lease payment for the solar equipment. You will receive income for the value of the SRECs. Your net electricity cost will be lowered. 6. What kind of roof is suitable for a solar array? To be suitable for a solar array through this program, a roof needs to meet the following criteria: Slanted roofs must have a southern-facing area oriented between approximately 145 degrees and 225 degrees. The roof must have minimal shading. The roof must be 10 years old or younger, and have only one layer of shingles. The roof must be in good condition without leaks or damage. 7. How long does a solar array last? The solar panels themselves are under warranty for 20 years, and experience has shown that most panels function well for years. The inverters the equipment that turns the DC electricity from the panels into AC power for your home carry a 10-year warranty, but the owner of the system will replace the invert one time at no cost during the term of the lease. As long as the funding source owns the system, they are responsible for all repairs and maintenance. 8. Why does a homeowner need to have a credit check, and what criteria are used? Residential solar arrays cost between $20,000 - $40,000 to install, on average. The funding source uses credit scores, late payment history, loan modifications and bankruptcies as a measure intended to indicate that their investment in your home will be safe, and requires a credit score of or higher. 9. Can homeowners ever purchase the solar array outright from the system s owner? Yes. After the sixth anniversary of the utility s commissioning of the system, the homeowner has the option, but not the requirement, to purchase the system at its fair market price at any time. The homeowner also has this option at the end of the agreement. Homeowners can also exercise the buy-out option if they sell their home prior to the six-year anniversary of the lease agreement. 10. Do homeowners need to pay any additional homeowners insurance because they have a solar array installed on their home? 3

4 Homeowners should not have to pay additional homeowners insurance for the solar array, because they do not own the array, and because the funding source insures the solar array against damage and theft. Under the solar contract, homeowners must maintain homeowner s insurance covering damage to their property during the term of the solar agreement. Homeowners are not responsible for damage to their property due to the negligence of the solar installer. In some cases, we have seen insurance companies ask homeowners to carry some additional coverage related to the presence of the array on their home usually costing a total of $25- $40/year. In this case, we suggest that homeowners contact the owner of the solar array and request a copy of their policy to demonstrate to the homeowner s insurer that the owner carries the necessary coverage. 11. Does a homeowner s property tax increase as a result of having a solar array installed? No. New Jersey law prohibits municipalities from raising a homeowner s property taxes as a result of having a solar array installed. During the installation process, you will fill out a form registering the solar array on your roof to avoid any increase in your property taxes due to the array. 12. What happens if a homeowner wants or needs to sell their home? The new purchaser of the home assumes the solar agreement, and continues to make the monthly lease payments while receiving the solar electricity and the SREC payments under the same terms as the original owner. The new homeowner must pass the same credit check that the original owner passed a presumed formality in light of the fact that the new homeowner would be required to have passed a similar or more stringent credit check in order to purchase the home. Most homeowners who move choose to transfer the agreement to the new homeowner in this way, because the solar array is a highly attractive feature of the home. Homeowners may also choose to buy out the lease for the solar equipment from the funding source and adjust their home s sale price to reflect the benefit of this. Homeowners who choose to do this do so because they believe this will increase the sale price they will receive more than the cost of buying out the lease from the owner. If the new owner does not want to assume the terms of the solar agreement, then the former owner or the new owner must buy out the lease for the remainder of the life of the agreement. 13. What is the impact of a solar array on the value, sales price, and speed of sale for homes? Research has shown that homes with solar arrays sell more quickly, and for a higher price, than similar homes without a solar array. To learn more, read the summary of the study conducted by Lawrence Livermore Laboratory. 14. Can condominium units have a solar array installed through this program? 4

5 Most often, this is not possible for several reasons. In order to have a solar project classified as a "residential application" as opposed to "commercial application," each condo unit owner has to have a separate solar system wired to their own electric meter. Additionally, a condo unit must have its own electric service, with its own "breaker box" along with enough space to install the inverter which converts the DC solar electricity produced on the roof to usable AC electricity for the unit. Often, condo owners share their building s roof as a whole. There is usually no clear delineation of roof ownership in condominium complexes, and in these cases it is unclear what portion of the roof belongs to each unit owner. In addition a condo unit may not have enough roof capacity to install enough panels to make the project feasible. 15. Who is the owner that provides the funding to install the solar array? There are multiple owners of the solar installations funded through this project. AP Solar regularly seeks to identify the most advantageous terms for its customers. 16. How can the owner afford to install the solar array at no cost? The owner receives economic benefits in three ways. a. Monthly lease payments The owner receives monthly lease payments from the homeowner. b. Federal Tax Credit The Federal government provides owners of solar arrays with a tax credit for 30% of the solar array s value. c. Depreciation The tax code allows business owners to deduct equipment depreciation costs on their tax returns. 17. What role does AP Solar play? AP Solar is the solar developer for the project. APS has secured access to program funding, and overseeing all engineering, installation, permitting and commissioning-related services. The staff at Advanced Performance Solar has extensive knowledge and experience in the building and solar industries. Read more about AP Solar at How is the system maintained? Is the homeowner responsible for any maintenance? The system owner not the homeowner - is responsible for the system s maintenance and upkeep. If any of the system s parts fail, the system owner is responsible for replacing them including panels, the inverter, and wiring. 19. What happens at the end of the agreement? At the end of the agreement, homeowners have three options. 5

6 a. Purchase the solar equipment at fair market value. The solar system should produce electricity for a total of 25 years or more. b. Tell the system owner to remove the solar system at no cost. c. Extend the lease agreement for an additional period of time. 20. What happens if a homeowner needs to repair the roof during the life of the system? If the panels need to be removed during the term of the agreement, the homeowner is responsible for the cost of removing and reinstalling the panels. This is why GreenFaith and AP Solar have established the requirements for the condition of the roof because we do not want homeowners to need to incur this cost. 21. Do homeowners receive any of the renewable energy credits, tax credits or values, or any other government grants or subsidy programs related to the solar array? Under the lease agreement, the homeowner receives all SREC values generated by the system on their roof. The homeowner also assigns to the system owner all tax credits and values (including depreciation) and the value of any other government grants or subsidies related to the solar array. Utilizing these incentives and credits allows the owner to recoup their investment of between $20,000 to $40,000 to install the solar array at no cost. 22. How does the system owner measure the amount of electricity generated by the array on my roof? The owner installs a utility-grade electricity meter connected to the solar array and measures the array s production through your high-speed internet connection. Homeowners can also view the electricity production via the internet. Homeowners must maintain a high-speed internet connection for the duration of the solar agreement. 6